The Fed Blog

Wednesday, August 24, 2011

Manufacturing Surveys

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There are six regional Feds that survey manufacturers in their districts every month. We update their findings in our US Business Surveys chart book. We also show the results of surveys conducted by five regional purchasing managers’ organizations for manufacturing. So far, there are three surveys available for August. They are the Fed surveys conducted for the Richmond, Philadelphia, and New York districts.

The average of the overall indexes for the three fell to -16.2 during August from -0.5 last month and from the most recent cyclical peak of 25.6 during March. It is now the lowest since April 2009. The average of the new orders indexes dropped to -15.2 in August from -3.5 in July and from the most recent cyclical peak of 21.2 during February. It too is now the lowest since April 2009.

There was a comparable soft patch in these averages last summer, with the overall average falling to a 2010 low of -1.8 during August. The new orders average fell to a low of -6.1 during August. However, this time, the averages are already lower than their lows of last year.

The plunge in the Philly index during August was shocking. It has been more volatile than the other surveys recently. However, both the Richmond and New York surveys are confirming that manufacturing turned weaker in August. During the month, the overall indexes fell to -30.7 in Philadelphia, -10.0 in Richmond, and -7.7 in New York. These are all new lows for this year and below their lows of 2010. The new orders indexes fell to -26.8, -11.0, and -7.8 in the three aforementioned districts, following the same pattern as the broader indexes.

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ABOUT: Dr. Ed Yardeni is the President and Chief Investment Strategist of Yardeni Research, Inc., a provider of independent investment strategy and economics research. This blog highlights excerpts from our research service, which is designed for investment and business professionals.

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